Material Loss Review of Signature Bank of New York, EVAL-24-02 (Part 2 of 2)
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
Act
Amend Client Anticipated Account Activity Reports form to capture all permitted
1 SR-2020 BSA #02
client products and activities
Ensure decisions for clearing or escalating automated transaction monitoring
2 SR 2020 BSA #03
system alerts reflect analyses of actual account activity
3 SR 2020 BSA #01 Ensure higher-risk customer account reviews document underlying activity
Commercial & Industrial Loan Portfolio
1 SR-2021 C&I #01 Increase reporting frequency of credit underwriting exceptions
Commercial Real Estate
Improve documentation of real estate evaluation assumptions for collateral
1 SR-2021 CECL #01
dependent commercial real estate loans
Credit Risk Management
1 SR-2019 CRM #02 Develop procedures to review borrower risk
2 SR-2019 CRM #08 Formalize loan pricing methodologies
3 SR-2021 CRM #01 Develop action plan to improve risk rating framework
Adhere to policy for real estate appraisals on distressed commercial real estate
4 SR-2021 CRM #02
loans
Enterprise Risk Management
1 SR-2018 ERM #04a Ensure an effective issue tracking system is in place
Liquidity
1 SR-2019 LIQ #01a Better support assumptions for deposit run-off in stress testing scenarios
2 SR-2019 LIQ #01c Consider the impact of high rate deposits in the stress testing scenario
3 SR-2019 LIQ #02a Document support for the deposits quantitative risk-rating framework
Consider depositors’ sensitivity to bank conditions as part of the deposit rating
4 SR-2019 LIQ #02b
framework
5 SR-2019 LIQ #03a Establish metrics to ensure liquidity level is sufficient at time intervals
6 SR-2019 LIQ #03b Conduct sensitivity testing of key assumptions in the liquidity stress test
7 SR-2019 LIQ #03c Improve liquidity stress testing model documentation
8 SR-2019 LIQ #03d Ensure adequate validation of stress testing includes effective challenge
9 SR-2019 LIQ #04d Consider potential impact on capital from actions taken to raise liquidity
10 SR-2019 LIQ #05 Improve system of effective challenge for stress modeling methodology
11 SR-2019 LIQ #06 Improve internal controls relating to liquidity risk management
Model Risk Management (MRM)
1 SR-2021 MRM #01 Expand MRM policy and establish standards for use of models with exceptions
2 SR-2021 MRM #02 Expand policy with standards and procedures for resolving outstanding findings
3 SR-2021 MRM #03a Establish documentation standards for third-party vendor models
4 SR-2021 MRM #03b Establish model document repository and indexing system
5 SR-2021 MRM #04a Expand scope of validations to include challenge to external data applicability
6 SR-2021 MRM #04b Ensure model validation assesses forecast accuracy of model outputs
Ensure variable selection process and assumptions are documented,
7 SR-2021 MRM #04c
substantiated
8 SR-2021 MRM #04d Document critical assumptions and limitations associated with model data
Establish data governance program and data analysis to measure quality and
9 SR-2021 MRM #04e
accuracy of inputs
Expand ongoing performance monitoring activities to include performance
10 SR-2021 MRM #04f
assessments quarterly
45
Material Loss Review
Signature Bank of New York
Count SR No. Brief Description
Assess and measure impact of excluding a data segment by third-party model
11 SR-2021 MRM #04g
developer
Perform sensitivity analysis as part of ongoing performance monitoring activities
12 SR-2021 MRM #04h
on critical model parameters
Sensitivity to Market Risk
1 SR-2018 SMR #01b Report all policy exceptions to the Board or Board committee
2 SR-2019 SMR #09a Establish limits for flattened and steepened yield curve shift scenarios
3 SR-2019 SMR #09b Define acceptable variance limits in policy for all major assumptions
Perform net income simulations in accordance with internal rate of return policy
4 SR-2019 SMR #09c
parameters
Strategic Planning
SR-2019 Strategic
1 Ensure the IAD evaluates the strategic planning process
Planning #06
Corporate Governance
Incorporate standards, expectations for new or modified products following
1 SR-2022 #01
project approval track
Ensure key risk metrics and limits are consistent with Board’s risk appetite, and
2 SR-2022 #02
monitored
Review, update, approve Operational Risk Management Committee charter and
3 SR-2022 #03
policies
4 SR-2022 #04 Ensure an effective Risk Control Self-Assessment framework is in place
Information Technology
Develop a comprehensive IT/IS Risk Assessment to include all of the business
1 SR-2019 IT #01
applications, hardware, and operating systems
Ensure the IT Asset Inventory includes sufficient and accurate details on
2 SR-2019 IT #02
hardware and software
Strengthen the Business Continuity Management program commensurate to the
3 SR-2021 IT #01
size, capacity, and risk profile of the bank
Expand the project management policy to include defining projects based on
4 SR-2021 IT #02b
size and complexity
5 SR-2022 #01 Improve management’s process for managing end of life systems
Determine whether the common vulnerability scoring system should be updated
6 SR-2022 #02
to the latest version
Ensure the Center for Internet Security standards are implemented for all
7 SR-2022 #03
operating systems and network devices
8 SR-2022 #04 Expand management’s current Succession Plan
Expand and increase project management reporting cadence to the Board or a
9 SR-2022 #05
Board-level committee
a
This SR was included in the 2021 Report of Examination (ROE) and was elevated to an MRBA in 2022.
b
This SR was included in the 2021 ROE, but was closed during 2022.
Matters Requiring Board Attention (MRBAs)
Count MRBA No. Description
Liquidity
1 MRBA-2019 LIQ #01 Ensure adequate liquidity contingency planning is in place
Corporate Governance
Implement an effective Issues and Event Management process and remediate outstanding
1 MRBA-2022 #01a
findings in a timely manner
Ensure organizational structure, decision making at all levels are appropriate and
2 MRBA-2022 #02
consistent with emerging risks associated with strategic initiatives
a
This MRBA was included in the 2021 ROE as an SR and was elevated to an MRBA in 2022.
46
Part II
********
FDIC Comments and OIG Evaluation
FDIC Comments and OIG Evaluation
On October 16, 2023, the FDIC Director of RMS provided a written response to a draft of this report.
The response is presented in its entirety beginning on page II-2. In its response, the FDIC agreed
with the findings and concurred with all six recommendations in the report. The FDIC’s proposed
corrective actions and its actions taken to date were sufficient to address the intent of the
recommendations. The FDIC plans to complete all corrective actions for the recommendations by
March 31, 2024. Therefore, we consider all six recommendations to be resolved.
All recommendations in this report will remain open until we confirm that corrective actions have
been completed and the actions are responsive. A summary of the FDIC’s corrective actions begins
on page II-7.
October 2023 EVAL-24-02 II-1
FDIC Comments
October 2023 EVAL-24-02 II-2
FDIC Comments
October 2023 EVAL-24-02 II-3
FDIC Comments
October 2023 EVAL-24-02 II-4
FDIC Comments
October 2023 EVAL-24-02 II-5
FDIC Comments
October 2023 EVAL-24-02 II-6
Summary of the FDIC’s Corrective Actions
This table presents management’s response to the recommendations in the report and the
status of the recommendations as of the date of report issuance.
Rec. Corrective Action: Taken or Expected Monetary Resolved:a Open or
No. Planned Completion Date Benefits Yes or No Closedb
1 The FDIC issued instructions to March 31, 2024 $0 Yes Open
examiners on August 29, 2023, via a
regional director memorandum (RD
Memo). Among other things, this RD
Memo instructs examiners to perform
enhanced follow-up and a progressive
supervisory response for institutions
that fail to address supervisory
recommendations in a timely manner.
The FDIC trained examiners on the
new instructions on September 13,
2023 and provided examiners an
opportunity to comment on the
instructions. FDIC officials will review
the comments to determine whether
adjustments or clarifications to the
instructions are warranted. The FDIC
is also preparing examples of
escalation of supervisory
recommendations, including MRBA,
in order to deliver additional training
to examiners by March 31, 2024.
2 The FDIC issued an RD Memo on March 31, 2024 $0 Yes Open
August 30, 2023 to examiners that,
among other things, requires large
bank examination teams to document
their assessment of all component
and composite ratings in quarterly
ongoing monitoring reports.
The FDIC trained examiners on these
new instructions on October 4, 2023
and examiners were provided the
opportunity to comment on the
instructions. The FDIC will review the
comments to determine whether
adjustments or clarifications to the
instructions are warranted. The FDIC
will also update the Risk Management
Manual of Examination Policies by
March 31, 2024 to emphasize to
examiners the significance of prompt
communication of risk and
supervisory results to bank
management.
October 2023 EVAL-24-02 II-7
3 The FDIC will conduct an evaluation March 31, 2024 $0 Yes Open
of existing examination guidance to
determine whether updates are
warranted. The evaluation will be
documented through a memorandum
from FDIC staff to the Director, RMS.
The memorandum will also address
recommendations for pursuing
updates if warranted.
4 The Director, RMS, evaluated current November 30, 2023 $0 Yes Open
practices and recommended changes
to the FDIC’s strategies for attracting
and retaining staff, including staff that
examine large, complex financial
institutions. The draft strategies were
delivered to the FDIC Chairman on
September 29, 2023. The Director,
RMS, is also studying and will make
recommendations related to the
allocation of examiner staffing within
the FDIC. Recommendations will be
coordinated with the Director, Division
of Administration; the General
Counsel; and the Director, Division of
Complex Institution Supervision and
Resolution and documented through
a memorandum to the FDIC
Chairman.
5 The FDIC will develop and implement March 31, 2024 $0 Yes Open
target metrics for the items described
in the recommendation and will
develop a process for monitoring
variances with the metrics. Examiner
instructions regarding the target
metrics and monitoring processes will
be communicated via an RD Memo.
6 RMS conducted an evaluation and December 31, 2023 $0 Yes Open
identified two sections of the Manual
to update. RMS is updating the
Liquidity section of the Manual to
expand the discussion of the volatility
of uninsured deposits and the
importance of contingency funding
plan considerations. This action will
be completed by December 31, 2023.
RMS is also updating the Report of
Examination Instructions relative to
the evaluation of concentrations of
uninsured deposits. This action will
be completed by October 31, 2023.
a
Recommendations are resolved when —
1. Management concurs with the recommendation, and the OIG agrees the planned corrective action is
consistent with the recommendation.
2. Management does not concur or partially concurs with the recommendation, but the OIG agrees that
the proposed corrective action meets the intent of the recommendation.
3. For recommendations that include monetary benefits, management agrees to the full amount of OIG
monetary benefits or provides an alternative amount and the OIG agrees with that amount.
b
Recommendations will be closed when the OIG confirms that corrective actions have been completed and are responsive.
October 2023 EVAL-24-02 II-8
Federal Deposit Insurance Corporation
Office of Inspector General
3501 Fairfax Drive
Room VS-E-9068
Arlington, VA 22226
(703) 562-2035
The OIG’s mission is to prevent, deter, and detect waste, fraud,
abuse, and misconduct in FDIC programs and operations; and to
promote economy, efficiency, and effectiveness at the agency.
To report allegations of waste, fraud, abuse, or misconduct
regarding FDIC programs, employees, contractors, or contracts,
please contact us via our Hotline or call 1-800-964-FDIC.
FDIC OIG website X, formerly known as Twitter
www.fdicoig.gov @FDIC_OIG www.oversight.gov/